Reasons Why Merchant Cash Advances
Are Now Appealing For Investors.
has been syndicated
on The LNS Platform
Individual MCA’s have been
funded in the LNS Platform
Has been funded on
the LNS Platform
Invest in Merchant Cash Advances directly through LNS. This innovative platform connects accredited investors with merchant cash advance funding companies, offering a unique investment opportunity.
Merchant Cash Advance funding companies are seeking additional capital to meet the increasing demand for advances. LNS has carefully selected several reputable funding companies interested in syndication and participation in their deal flow. Accredited investors can now access these funders and participate in their deal originations, knowing that LNS has conducted thorough due diligence and continues to monitor the funders' deal flow and business. LNS allows investors to diversify across multiple funding companies and thousands of merchants these funding companies advance to. In fact, when an investor invests through the LNS platform, their maximum exposure to any single cash advance is 5%.
You Will Start Getting Money Back Within A Week.
Make Money Quickly
Average advance only lasts between 3-12 months so you can make a great return in a short period of time.
Diversify Risk
We Syndicate Investor Capital Across Multiple Advances to decrease risk and exposure.
Due to stricter regulations and shifting risk assessments, businesses, especially those with annual revenues under $5 million, are facing unprecedented challenges in securing the necessary funding for their operations. According to Delaware Business Now, an average of 70% of these businesses are being denied loans.
Due to various factors, small businesses often find it difficult to secure traditional loans from banks or the Small Business Administration. Even when approved, the wait times can be prohibitive. This has fueled the growth of non-traditional financing options, with Debanked estimating the Merchant Cash Advance (MCA) market to be worth over $100 billion globally. If a business is unable to obtain a traditional loan and wants to avoid relying heavily on high-interest credit cards, a Merchant Cash Advance can be a viable alternative.
MCAs are a short-term financing option, usually lasting between 3 to 12 months. Rather than a traditional loan, an MCA involves exchanging a lump sum of cash for a percentage of future sales. Since MCAs are unregulated, business owners have the flexibility to use the funds however they wish, unlike with traditional loans. To learn more about how MCAs and invoice factoring work, visit our Merchant Cash Advance page.
The S&P 500 has historically averaged an annual return of around 8% since 1957, according to Investopedia. However, stock market volatility can make this modest return feel uncertain. Investing in merchant cash financing has the potential to yield significantly higher returns compared to the stock market, often with lower volatility. Until recently, MCA investing was a private, high-risk domain primarily accessed by accredited investors and hedge funds, requiring high-interest rates to fund MCAs for various businesses. For accredited investors, diversifying through different funders or across underlying merchant portfolios was nearly impossible. The primary risk lay in relying on a single funding company’s underwriting process and deal quality, with minimal transparency into their operations. As a result, singular funding risks could ultimately pose significant challenges to investors.
Investing in MCAs can carry substantial risks, even for highly accredited investors, particularly during uncertain economic times. One key risk is the lack of collateral required from businesses receiving MCAs, meaning that if a business fails to repay, there’s no insurance to protect the investor’s capital. Additionally, MCA investments have traditionally been concentrated in single funding companies rather than diversified across multiple businesses, further amplifying the risk.
Investing in MCAs offers the unique benefit of directly supporting businesses in their growth, especially smaller, local companies. There’s an intrinsic reward in helping mom-and-pop shops thrive, in addition to the potential for substantial returns. MCAs can generate returns that exceed those of traditional high-yield options available in public markets. Adding alternative investments like MCAs to your portfolio can also help mitigate risk, as MCAs have minimal correlation to stock market fluctuations. Balancing traditional investments with MCA investments creates a more diversified portfolio, potentially reducing volatility while fostering healthier returns.
Advancements in technology and increased access to information are transforming the investment landscape, particularly in alternative investing. New platforms are breaking down traditional barriers, making these investment opportunities more accessible and reducing costs for investors. Minimum investment thresholds are now lower, providing a practical entry point for a broader range of investors. Platforms like LNS Capital Partners, specifically for merchant cash advances, connect investors directly with merchant funding companies, pooling funds for selected businesses. This approach greatly reduces risk by capping individual investments at 5% per business, allowing investors to diversify across hundreds of companies. Unlike traditional MCA investing, where options were limited, these platforms let investors choose specific companies, offering greater control and a more targeted approach to investment.
At LNS, investors are paired with deals that align perfectly with their individual risk tolerance and specific preferences, such as the underlying merchant's FICO score or loan term length. Our investors now have a similar tool set most professional investors have access to ecome an investor, you do have to be an accredited investor to sign up for LNS Capital Partners crowdfunding opportunity. All you have to do is fill out a basic application, then complete a risk assessment, receive a background check, determine how much of your investment you want to allocate to MCA, and then receive the return in just a few days.
Discover a high-yield, diversified investment opportunity with our merchant cash advance platform. Designed for sophisticated accredited investors seeking alternative assets, contact us today to learn more.
